Asking prices increased 5.9 percent year-over-year in January in the latest Trulia Price Monitor, an assessment of all the asking prices on the website’s listings.
Additionally, asking prices were up 0.3 percent quarter-over-quarter, 0.9 percent from December to January, and when excluding foreclosures, year-over-year gains were up 6.5 percent.
Trulia Price Monitor – It’s All About Fundamentals
Eighty-six of the nation’s 100 largest metro areas reported rising asking prices in January, and Jed Kolko, Trulia’s chief economist, said that the key to increasing asking prices will be strong market fundamentals.
“Strong job growth, low vacancy rate, and low foreclosure inventory – not huge price gains – are signs of a healthy housing market,” Kolko said. “Without strong underlying market fundamentals, price rebounds might be here today, but gone tomorrow.”
Housing markets with those attributtes, the Trulia Price Monitor found, include San Francisco, Denver and Houston, though markets such as Newark and Chicago continue to struggle, with weaker market fundamentals holding down price gains.
Robyn Jones, the broker/owner of Robyn Jones Homes, reiterated Kolko’s mantra of market fundamentals as being key to Houston’s success.
“We are seeing this trend in the Katy and Houston area due to the healthy Houston economy, low interest rates and multiple offers on certain properties, i.e. homes with a high level of upgrades, pools, golf courses, desirable locations, etc.,” Jones said. For example, most pool homes in Cinco Ranch are pushing the envelope on the price per sf (some with no supporting comp’s) and they are getting it. As buyers get pushed out of the premium homes due to bidding wars, they move to the other homes, which help push those prices up.”
Rental Markets Cooling Down?
Another interesting finding in the Trulia Price Monitor was how asking rents seemed to cool down in January, at least relative to the spectacular gains of 2012. Though national asking rents did increase 4.1 percent year-over-year, that’s down from a 4.7 percent increase in July 2012; and some of the nation’s hottest rental markets showed similar declines, with San Francisco’s rents rising 2.4 percent in January, compared to 11.5 percent in July 2012.
Of course, there are outliers, with other major markets slowing less or even increasing (sometimes substantially). For instance, in Chicago, asking rents were up 4.9 percent, down just 0.3 percentage points from July, and Miami, at 9.1 percent, was down 1.1 percentage points; Houston’s rental market, though, continues to reach for the starts, increasing 15.8 percent in January – up from 8.8 percent in July 2012.